EXHIBIT 99.1
CommScope to Pay $650 Million in Transaction That Doubles Its Revenues,
Combining #1 Maker of Coaxial Cable With a Leading Global Manufacturer
Of Fiber Optic Cable
Complementary Channel Access to Provide Customers With End-To-End
Cable Solutions
HICKORY, N.C., July 24 /PRNewswire/ -- CommScope, Inc. (NYSE: CTV)
today announced that it will partner with Furukawa Electric Co., Ltd. of
Japan (Tokyo: 5801) to acquire the Fiber Optic Cable business of Lucent
Technologies (NYSE: LU), creating a leading global supplier of broadband
communications cable by combining leaders in coaxial cable and fiber optic
cable. The transaction will enhance CommScope's technology platform with
key intellectual property and research and development, expand its channel
access by adding complementary capabilities and provide it with a strategic
position in fiber optic manufacturing.
Under the terms of the transaction, CommScope and Furukawa will enter
into two joint ventures, one for the fiber cable portion of Lucent's fiber
optic business and one for the transmission fiber portion of the same
business. CommScope will invest approximately $650 million for its
ownership in the two joint ventures, which will be funded through the
issuance of a combination of debt and equity. Based on CommScope's
preliminary due diligence, management believes that this transaction will
be accretive to CommScope's earnings in the first full year, excluding
one-time, transition-related charges.
"We are extremely pleased to partner with Furukawa to acquire these
unique, high-quality assets, thereby combining the #1 global manufacturer
of coaxial cable with one of the leading global manufacturers of fiber
optic cable to create a preeminent broadband cable supplier," said Frank M.
Drendel, Chairman and Chief Executive Officer of CommScope. "This
transaction diversifies our product offerings while adding leading
technology, and based on the last twelve months, would have more than
doubled CommScope's revenues. This partnership will add fiber manufacturing
capabilities to CommScope's existing cable products and distribution
channels, and will be among the few producers of premium fiber cable in the
world."
Drendel added, "CommScope and Furukawa have both earned reputations
for providing superior customer service, and we intend to work together
diligently to serve Lucent's existing fiber optic cable customers. As
CommScope has done with our coaxial, LAN and wireless cable businesses, we
will focus on the evolving needs of current and new customers by providing
state-of-the-art manufacturing, superior technical support, timely product
delivery and dependable service."
CommScope will own 51% of the fiber cable joint venture, which
includes transmission fiber and cable manufacturing capabilities at a 2.9
million square foot facility in Norcross, Georgia, as well as facilities in
Germany and Brazil and a joint venture in Russia. With a majority ownership
in the fiber cable joint venture, CommScope expects to consolidate those
operating results in its financial statements, which for the last twelve
months would have more than doubled CommScope's revenues. In addition, the
cable joint venture will acquire Lucent's 51% interest in Fitel, a joint
venture between Lucent and Furukawa that produces high-performance loose
tube cable.
The fiber joint venture will be 49% owned by CommScope, with Furukawa
owning a 51% interest, and is expected to be accounted for by CommScope
using the equity method. The transmission fiber joint venture includes the
Multimode Optical Fiber Center of Excellence in Sturbridge, Massachusetts,
which develops and manufactures graded-index multimode optical fibers, as
well as Litespec, a joint venture between Lucent and Sumitomo Electric
Lightwave Corporation that manufactures single mode optical fiber.
Drendel continued, "We're excited to jointly own and operate Lucent's
state-of-the-art facilities, which will further enhance CommScope's
world-class manufacturing capabilities and is expected to provide us with
significant operating synergies through the experienced management teams
and highly skilled workforce. We believe we will be able to drive
efficiencies and save costs by sharing our respective manufacturing
processes and techniques. We also look forward to building a strong
partnership with the employees of Lucent's fiber optic cable businesses."
Dr. Katsuhiko Okubo, Ph.D., Senior Managing Director of Furukawa said,
"We are very pleased to join forces with CommScope in this exciting
transaction and are confident in our ability to work together to serve our
customers and maximize the value of our optic fiber and cable businesses."
This transaction is part of a $2.75 billion purchase by Furukawa and
Corning Inc. (NYSE: GLW) of Lucent's entire Optical Fiber Solutions
Business, which includes the Optical Fiber and Cable business (including
specialty and transmission); Fiber Optic Apparatus and Premises business;
and Specialty Fiber Devices business.
Drendel concluded, "While these are challenging times, we are
confident that there are exceptional long-term opportunities in the global
fiber optic and coaxial cable markets as applications for broadband
communications continue to grow throughout the world. By purchasing
world-class assets in the current pricing environment, we believe CommScope
will be well positioned to benefit when market conditions improve."
The transaction, which is subject to various regulatory approvals and
other usual closing conditions, is expected to close by the end of
September 2001. CIBC World Markets Corp. is serving as CommScope's
financial advisor on the transaction and Fried, Frank, Harris, Shriver &
Jacobson and Robinson, Bradshaw & Hinson are the Company's legal advisors.
CommScope is the world's largest manufacturer of broadband coaxial
cable for Hybrid Fiber Coaxial (HFC) applications and is a leading supplier
of high-performance fiber optic and twisted pair cables for LAN, wireless
and other communications applications. Visit CommScope at its web site --
http://www.commscope.com
Conference Call Information
The Company plans to hold a telephonic conference call to discuss the
CommScope and Furukawa joint ventures and second quarter results today at
5:00 p.m. Eastern Time. To participate in the conference call, all
participants should dial 212-896-6010. Please plan to dial in about 10
minutes before the start of the call to facilitate a timely connection. A
simultaneous webcast and slide presentation of the conference call can be
accessed from the CommScope website at http://www.commscope.com or
http://www.videonewswire.com/COMMSCOPE/072401/.
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If you are unable to participate in the call and would like to hear a
telephonic replay, you may dial 800-633-8284. International callers should
dial 858-812-6440 for the replay. The replay ID is 19258169. The replay
will be available through Thursday, July 26, 2001. A webcast replay will
also be archived for a limited period of time following the conference call
via the Internet on CommScope's web site (http://www.commscope.com).
This press release contains forward-looking statements regarding
CommScope's market position, plans, fiber and fiber cable technology,
outlook and effects of establishing joint ventures with Furukawa that are
based on information currently available to management, management's
beliefs and a number of assumptions concerning future events.
Forward-looking statements are not a guarantee of performance and are
subject to a number of uncertainties and other factors, which could cause
the actual results to differ materially from those currently expected. The
potential risks and uncertainties that could cause actual results to differ
materially include, but are not limited to, the ability of the company to
complete the joint venture transactions with Furukawa, the ability to
integrate the joint venture operations and technologies effectively, the
ability of the joint venture to maintain Lucent's customer base, the
ability of the joint venture to recruit and retain qualified employees,
general industry and financial market conditions, worldwide economic
conditions, telecommunications industry capital spending, expected demand
from AT&T and others, excess capacity, changes in cost and availability of
key raw materials, successful implementation of CommScope's bimetals
operation and other vertical integration activities, pricing and acceptance
of CommScope's products, successful expansion and related operation of our
facilities, effective implementation of our integrated information system,
developments in technology, industry competition, ability of our customers
to secure adequate financing, regulatory changes affecting our industries
and other factors. For a more detailed description of factors that could
cause such a difference, please see CommScope's filings with the Securities
and Exchange Commission. In providing forward-looking statements, the
Company does not intend, and is not undertaking any duty or obligation, to
update these statements as a result of new information, future events or
otherwise.
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SOURCE CommScope, Inc.
Web site: http://www.commscope.com
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CONTACT: investors, Phil Armstrong of CommScope, Inc.,
+1-828-323-4848; or press, Anna Cordasco, Paul Caminiti, or
Stephanie Pillersdorf of Citigate Sard Verbinnen,
+1-212-687-8080; or Betsy Lambert (APR) of CommScope, Inc.,
+1-828-323-4873
Audio: http://www.videonewswire.com/COMMSCOPE/072401
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